Insolvency and conflicting security interests of creditors

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Chapter 21 in The Economic Analysis of Civil Law, 2022, pp 525-537 from Edward Elgar Publishing

Abstract: For the legal regulation of credit it is crucial to ascertain which objectives are to be pursued from an economic point of view. It is particularly important to provide incentives for an efficient amount of total lending to a particular debtor and for an efficient level of interest rates. The granting of credit that achieves this goal is termed ex-ante efficient. If a company, which took up credits fails the insolvency procedure must guarantee that creditors have an incentive to keep the company going, if its business idea is good and liquidate it if the business idea is bad (ex post efficiency). Only few insolvency procedures reach this policy target.

Keywords: Economics and Finance; Law - Academic (search for similar items in EconPapers)
Date: 2022
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